It’s a Miracle!
The federal government got one right. It could be just the law of averages catching up to Washington decision-makers, but a win is a win.
FERC, after months of doing what government entities do – which is form committees to study the obvious – has finally issued it’s “first-ready, first-served” interconnection directive known as Order 2023.
I shouldn’t make fun. This was a difficult decision that required careful review.
You see, FERC faced a complex and daunting challenge.
Today every wannabe renewable developer can file an interconnection application to connect a project to the grid. It is immaterial whether the project has financial viability or any probability of ever getting built. These applications are most often reviewed on a first-come, first-serve basis. A massive backlog has resulted that will take years before the viable projects get their interconnection application reviewed.
As I said, an extremely complex problem with many nuances.
Face it: to correct the problem we would need to set minimum requirements for interconnection submissions. That isn’t very democratic. What’s democratic is you get in line and you’re serviced based on when you arrive.
Except this isn’t the DMV. And these application aren’t to renew your car registration. They are to build much needed clean energy projects, and being first in line should count for squat.
So after not having issued a major change to the interconnection requirements in two decades (yes – you read that right -20 years), and upon careful analysis, FERC determined that perhaps a new approach might be warranted. Why not prioritize interconnection applications based on how “ready” or likely a project is to actually get built.
Genius! Why didn’t I think of that.
That’s is only half the battle - or really a third - but we’ll get to that in a minute. The other issue is it often doesn’t cost a prospective developer much money to secure a place in the interconnection line. Order 2023 also will require customers to pay larger interconnection study deposits, meet tighter site control requirements, and pay a commercial readiness deposit.
Now here’s where it gets a bit tricky. The Order also will set deadlines for regional transmission organizations and other transmission providers to complete interconnection studies. And it will impose penalties for missing deadlines.
I’m all in favor of holding the entities that manage the grid accountable. Matter of fact it’s about time. Up to now, they pretty much have had carte blanche. But here’s the rub: there is a shortest of electrical engineers with the requisite knowledge to review interconnection applications.
That’s a problem FERC can’t fix, but will continue to slow the process of getting projects connected. Hopefully, the market, and law of supply and demand kicks in to address this bottleneck.